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First Cut: ADP National Employment Report is another month of exceptional gains in private payrolls

The ADP National Employment Report for April put the number of workers added to private payrolls at 275,000 after up 151,000 in March (previously 129,000). This was well above market expectations and indicates that any softening in the pace of hiring in February and March was likely associated with some short-term influences that have since faded.

Goods-producers added 52,000 workers in April after dipping 1,000 in March. Much of it was due to a gain for constructions workers (49,000) as home building got under way after the winter months. Manufacturing gains were small (5,000) possibly due to overall slower expansion for the factory sector. One regional survey indicated that some workers are leaving manufacturing for construction jobs. This may lead to further constraints in hiring for the factory sector as businesses have reported difficulty in finding qualified workers.

Hiring in services was up 223,000 in April. This may be in part a rebound after the partial federal government shutdown that kept many contractors from hiring in February and into March as they awaited payment of existing contracts and closure of new ones.

The government data on payrolls does not necessarily track that from the ADP. There can be significant misses. However, it fairly consistently signals the direction of private payrolls in the BLS numbers. Market expectations for the Friday Employment Situation release at 8:30 ET forecast private payroll gains of around 170,000. The ADP report may prompt some cautious upward revisions in estimates.

 

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